Posted by Matthew Rachek.
One of the biggest issues that industries of all kinds deal with constantly is being able to filter out counterfeits from their marketplace. Counterfeits and other forms of knock-offs are not good for the market because they drive profits away from those that deserve the reward and often times fund criminal organizations.
The music industry has dealt with counterfeits since its existence. With the continued growth of technology and new ways for consumers to listen to their favorite artists, it has become harder and harder for the in the industry to regulate how the money is coming in. In fact often times, counterfeit CDs or knock-off streaming services do not compensate the artist at all.
In an article published in the Wall Street Journal on October 30, 2016, it explained how these music “pirates” have been flooding online retailers such as Amazon.com, “with counterfeit CDs that often cost nearly as much as the official versions and increasingly are difficult to distinguish from the real goods.”
The good news is that Amazon.com has recognized the problem an is making the right ethical decision by making sure that their stakeholders all receive the product they are expecting to receive at checkout. By doing this they are also trying to ensure that the artist and producer of the music receive proper compensation for their work so that the money does not make its way into the hands of the music pirates.
In a statement released by Amazon.com they wrote, “We are constantly innovating….to improve the ways we detect and prevent counterfeit products from reaching our marketplace. We work hard on this issue every day….” One of the ways they ensure that customers, a stakeholder, is satisfied with their product is by offering refunds for any product that is not as advertised. While this may initially hurt Amazon.com’s bottom line this is an essential moral decision because in the long-run consumers will be more likely to trust Amazon.com and buy other products off the site.
As technology continues to find new innovations it is almost certain that counterfeits and pirates will new be completely taken out of the market place, especially in the music industry. However it is very reassuring for a large company like Amazon to take nope of the issue and try to take steps to solve the issue.
Matthew is an accounting student at the Stillman School of Business, Seton Hall University, Class of 2018.
Sources:
http://www.cbsnews.com/news/amazon-struggling-to-keep-counterfeits-off-market-retailer-says/
http://www.wsj.com/articles/boost-in-online-pirated-cd-sales-deal-another-blow-to-music-industry-1477867243